The folks at Eurogamer recently hosted a Star Wars: Knights of the Old Republic II retrospective podcast, to which they invited several members of the original development team, including Chris Avellone and Codex regular Anthony Davis, as well as two members of the The Sith Lords Restored Content Mod team. The podcast is summarized in the accompanying article:

To this day one decision still plagues Chris Avellone's mind: should Knights of the Old Republic 2: The Sith Lords have had more Revan in it? BioWare and LucasArts hadn't forbidden it - instead, Obsidian had decided to focus on new characters to allow more creative breathing room.​

"But I don't know if that was the best decision," Avellone ponders, speaking in a Eurogamer KOTOR2 podcast other members of Obsidian and The Sith Lords Restored Content Mod join us for. You can listen to it in full right now, jokes 'n all.​

"There's a lot of design decisions that occurred in Knights of the Old Republic 2 that, to this day, I still question whether that was the right thing to do or not, and one was, ideally we should have maybe looked for more ways to introduce Revan in the sequel.​

"But then again," he adds, "when we were plotting out the idea of doing the third game we just thought it would be cool if we were foreshadowing what Revan was really doing in Knights of the Old Republic 1, and what he was preparing for in Knights of the Old Republic 2, and then bring it to a close, the end of the trilogy, but we didn't get a chance to do that."​

Yes, a Knights of the Old Republic 3 game existed in pre-production at Obsidian Entertainment.​

[...] Knights of the Old Republic 3 would still involve the Ebon Hawk ship, your base and your home, and you'd have "a few" of the companions from the other KOTOR games. "You definitely have T3-M4 and HK-47 with you," he says, and at one point HK-47, its legs dismantled, would "ride around in your backpack like C-3PO does with Chewbacca in Empire Strikes Back". "So during one of the sequences in the game," Avellone expands, "you'd actually have HK-47 firing behind you and being your cover support while you're carrying him around on your back and getting to a repair station."​

That KOTOR3 pitch, which is different to the Star Wars pitch Obsidian is trying on Disney, never got past pre-production. "It was a matter of getting LucasArts to greenlight the title and I... To be honest I don't know all the reasons that went into this, whether they wanted to have an internal team do it, whether they logistics didn't work out...​

"Ultimately," he says, "it felt like we were pitching and pitching and it just wasn't going anywhere, and at some point people just drew a line and said 'it's just not going to happen', which made us kind of sad, but, OK, if that's the business, that's the business."​

It could have had something to do with new consoles - PS3 and Xbox 360 - arriving and engines needing redoing, which would have been expensive and time consuming, points out Dan Spitzley, then senior programmer, now lead programmer at Obsidian. "That's a good point," concedes Avellone. "Thanks, consoles, thank you."​

Oh, MCA, your burning hatred for the console warms my heart. Read the entire article for a closer look at KOTOR2's design process, and lots of warm and fuzzy nostalgia from Obsidian's early days. It's great stuff.